London Daily

Focus on the big picture.
Wednesday, Jul 02, 2025

"The Money Is Here": COP26 Banks On Boosting Climate Finance

"The Money Is Here": COP26 Banks On Boosting Climate Finance

Cost estimates vary but it is thought that it will take between $3-4 trillion annually -- around 2 percent of global GDP -- to reach net-zero by mid-century.

How can the world find the cash to limit global warming to liveable levels and completely decarbonise the economy within 30 years? That's the $100-trillion-dollar question.

Cost estimates vary but it is thought that it will take between $3-4 trillion annually -- around 2 percent of global GDP -- to reach net-zero by mid-century.

Financiers and governments at the COP26 summit believe they have found a way to come up with enough.

"The money is here if the world wants to use it," said UN climate finance envoy Mark Carney, who has overseen the creation of a vast alliance of banks and funds that say their portfolios are ready for net-zero investments.

The Glasgow Financial Alliance for Net Zero (GFANZ) represents assets worth $130 trillion, which Carney and others said it could be mobilised to pay for the world's transition to carbon neutrality.

Its institutions will work towards cutting emissions by 50 percent by 2030, will need to report on progress every year and submit enhanced funding plans every five.

"We now have the essential plumbing in place to move climate change from the fringes to the forefront of finance so that every financial decision takes climate change into account," Carney said.

Finance is a fundamental part of climate action, in theory freeing up developing countries' national budgets and helping them build green infrastructure.

But a historic lack of money from rich emitters has hampered nations' plans.

"We're very engaged in climate action. But finance is a fundamental problem, and it will determine the delivery of our promises," said Indonesian finance minister Sri Mulyani Indrawati.

"We don't need $130 trillion, just $270 billion!" she said, referring to the estimated annual cost of her country decarbonising by mid-century.

The Glasgow funding initiative also raised the hackles of environmental groups, who pointed out that it left the door open for the funds involved to continue investing in fossil fuels.

"More than $130 trillion and not a single rule to prevent even one dollar from being invested in the expansion of the fossil fuel sector," said Lucie Pinson, executive director of the Reclaim Finance initiative.

The alliance has no set limits on carbon "offsets" to reduce net emissions and does not impose targets on indirect emissions.

 'Marathon'


Fossil fuel investment by large banks has risen significantly since the 2015 Paris Agreement was signed.

But finance is waking up to the need to diversify away from dirty energy or risk stranding major assets such as coal mines or gas pipelines that get mothballed before their lifespan expires.

"We're seeing a big change in private finance sector, who is realising that climate risks are important for their portfolios," UN climate chief Patricia Espinosa said Wednesday.

Espinosa also hinted that the feted $100-billion-a-year figure -- promised by rich nations more than a decade ago to help vulnerable nations prepare for climate impacts -- would likely be met by 2022.

But even that would be a drop in the ocean of what is needed to decarbonise the global economy.

US Treasury Secretary Janet Yellen stressed the role private finance was likely to play.

"The private sector is ready to supply the financing to set us on a course to avoid the worst effects of climate change," she said.

But the proof will be in how quickly -- and how much -- these initiatives deliver to countries requesting assistance.

Lorena Gonzalez from the World Resources Institute said there had been "encouraging signs" for climate finance at COP26.

"It's crucial these finance reach the countries in 2022 and not in five years or later," she said.

Simon Stiell, Grenada's minister for Climate Resilience, said that the funding potential of the Glasgow alliance to keep the 1.5C temperature goal in reach was akin to a "marathon".

"The sprint is adaptation, to adapt to 1.1C", the amount Earth has already warmed, he said.

Newsletter

Related Articles

0:00
0:00
Close
Poland Implements Border Checks Amid Growing Migration Tensions
Political Dispute Escalates Between Trump and Musk
Emirates Airline Expands Market Share with New $20 Million Campaign
Amazon Reaches Milestone with Deployment of One Millionth Robot
US Senate Votes to Remove AI Regulation Moratorium from Domestic Policy Bill
Yulia Putintseva Calls for Spectator Ejection at Wimbledon Over Safety Concerns
Jury Deliberations in Diddy Trial Yield Partial Verdict in Serious Criminal Charges
House Oversight Committee Subpoenas Former Jill Biden Aide Amid Investigation into Alleged Concealment of President Biden's Cognitive Health
King Charles Plans Significant Role for Prince Harry in Coronation
Two Chinese Nationals Arrested for Espionage Activities Against U.S. Navy
Amazon Reaches Major Automation Milestone with Over One Million Robots
Extreme Heat Wave Sweeps Across Europe, Hitting Record Temperatures
Meta Announces Formation of Ambitious AI Unit, Meta Superintelligence Labs
Robots Compete in Football Tournament in China Amid Injuries
Trump Administration Considers Withdrawal of Funding for Hospitals Providing Gender Treatment to Minors
Texas Enacts Law Allowing Gold and Silver Transactions
China Unveils Miniature Insect-Like Surveillance Drone
OpenAI Secures Multimillion-Dollar AI Contracts with Pentagon, India, and Grab
Marc Marquez Claims Victory at Dutch Grand Prix Amidst Family Misfortune
Germany Votes to Suspend Family Reunification for Asylum Seekers
Elon Musk Critiques Senate Budget Proposal Over Job Losses and Strategic Risks
Los Angeles Riots ended with Federal Investigations into Funding
Budapest Pride Parade Draws 200,000 Participants Amid Government Ban
Southern Europe Experiences Extreme Heat
Xiaomi's YU7 SUV Launch Garners Record Pre-Orders Amid Market Challenges
Jeff Bezos and Lauren Sanchez's Lavish Wedding in Venice
Russia Launches Largest Air Assault on Ukraine Since Invasion
Education Secretary Announces Overhaul of Complaints System Amid Rising Parental Grievances
Massive Anti-Government Protests Erupt in Belgrade
Trump Ends Trade Talks with Canada Over Digital Services Tax
UK Government Softens Welfare Reform Plans Amid Labour Party Rebellion
Labour Faces Rebellion Over Disability Benefit Reforms Ahead of Key Vote
Jeff Bezos and Lauren Sánchez Host Lavish Wedding in Venice Amid Protests
Trump Asserts Readiness for Further Strikes on Iran Amid Nuclear Tensions
North Korea to Open New Beach Resort to Boost Tourism Economy
UK Labour Party Faces Internal Tensions Over Welfare Reforms
Andrew Cuomo Hints at Potential November Comeback Amid Democratic Primary Results
Curtis Sliwa Champions His Vision for New York City Amid Rising Crime Concerns
Federal Reserve Proposes Changes to Capital Rule Affecting Major Banks
EU TO HUNGARY: LET THEM PRIDE OR PREP FOR SHADE. ORBÁN TO EU: STAY IN YOUR LANE AND FIX YOUR OWN MESS.
Trump Escalates Criticism of Media Over Iran Strike Coverage
Trump Announces Upcoming US-Iran Meeting Amid Controversial Airstrikes
Trump Moves to Reshape Middle East Following Israel-Iran Conflict
Big Four Accounting Firms Fined in Exam Cheating Scandal
NATO Members Agree to 5% Defense Spending Target by 2035
Australia's Star Casino Secures $195 Million Rescue Package Amid Challenges
UK to Enhance Nuclear Capabilities with Acquisition of F-35A Fighter Jets
Russian Shadow Payments via Cryptocurrency Reach $9 Billion
Explosions Rock Doha as Iranian Missiles Target Qatar
“You Have 12 Hours to Flee”: Israeli Threat Campaign Targets Surviving Iranian Officials
×